Arizona developer, family accused of $20 mil fraud over 20 years

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Mohave County developer John Hoover and his wife and son are accused of bilking $20 million from 460 investors and then using a bankruptcy to avoid detection.

Federal authorities say the Hoovers hid hundreds of thousands of dollars in assets, including luxury cars, artwork, jewelry and property by transfers to companies they created and moving purchases through relatives.

A judge this week denied Hoover bail, saying he posed a significant flight risk because of hidden foreign assets and his willingness to deceive authorities over the extent of his foreign travel. The judge cited Hoover's ownership of a $3.5 million Paris apartment as one example.

A Mohave County developer and his family are being accused of bilking $20 million from 460 investors in a scheme that federal authorities say lasted almost 20 years.

John Hoover, his wife and their son are also accused of trying to cover up the fraud by filing bankruptcy and using a series of transactions to hide assets worth hundreds of thousands of dollars.

A federal judge last week took the unusual step of denying Hoover bail, saying he posed a significant flight risk.

The judge said Hoover, who is a licensed attorney in California, is "willing and able to engage in significant patterns and practices of criminal deception."

The judge said evidence indicated Hoover had a wealth of hidden foreign assets, including a $3.5 million apartment on the River Seine in Paris, deceived the government about the extent of his foreign travel and for years has been using family members as proxies for lavish purchases even after filing for Chapter 7 bankruptcy liquidation in 2011.

A search of Hoover's Mohave County residence in April by the FBI yielded tens of thousands of dollars in luxury items, according to the indictment, including: French bank accounts; a $20,300 18-carat white-gold Vacheron & Constantin watch; a $22,150 platinum Philippe Patek watch; a $62,182.40 painting; eight fur coats worth $5,000 to $11,500 each; and a 7-9-carat diamond ring.

"If he were convicted at trial of all charged crimes, Hoover will likely spend the rest of his life in a federal prison," Judge Lawrence Anderson wrote in his order denying bail.

Neither Hoover; his wife, Deborah Boice Hoover; their son, John Brandon Hoover; or their attorney could be reached for comment Tuesday.

The senior John Hoover is a homebuilder in Fort Mohave and surrounding areas.

According to the indictment, Hoover created nearly two dozen companies that he used to solicit money from Arizona and California investors for bogus real-estate developments beginning in 1997. Several investors were widows who, authorities said, gave Hoover control of the bulk of their estates based on his friendship with their families and because of the trust he developed as an attorney.

Authorities said Hoover told investors their money would go to specific real-estate developments and then diverted the money for his own use. In some cases, Hoover told investors that their money had been placed in secure loans, while he used it to invest in his own high-risk speculative real-estate ventures in Arizona, according to the indictment.

Hoover had investors liquidate retirement accounts, life-insurance policies, mutual funds and securities, and Social Security death benefits, according to the indictment.

Hoover used investor money to pay some expenses at the country club, but most went for his living expenses, according to the indictment. Among those expenses were a multimillion-dollar home and a condominium in Newport Beach, Calif.; the apartment in Paris; a $150,000 Bentley Flying Spur and other high-end automobiles; jewelry; artwork; furnishings; and French school for his daughter. Authorities also said Hoover took vacations disguised as business trips to Hawaii, China, South America and Europe.

Authorities said that when Hoover ran out of money, he and his son refinanced properties with false representations about salary, assets, liabilities, employment and sources of down payments. Then, he and his wife filed bankruptcy while hiding assets, authorities said.

"Hoover is an intelligent, talented, an industrious real estate developer with dramatically diverse personalities," Anderson wrote in his order. "One is an exemplary side with no prior criminal history — a husband and father clearly devoted to his wife and children, who blindly believe in his innocence and unhesitatingly follow his every instruction — and a criminal side, motivated by greed, selfishness, and a creative imagination willing to deceive his former friends, clients, and the HOA members in his own real estate developments for his own personal and family benefit."